Atlanta Condos For Sale

What’s Causing Ongoing Home Price Appreciation?

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What’s Causing Ongoing Home Price Appreciation?

What’s Causing Ongoing Home Price Appreciation? | MyKCM

If you’re thinking about making a move, you probably want to know what’s going to happen to home prices for the rest of the year. While experts say price growth will moderate due to the shifting market, ongoing appreciation is expected. That means home prices won’t fall. Here’s a look at two key reasons experts forecast continued price growth: supply and demand.  

While Growing, Housing Supply Is Still Low

Even though inventory is increasing this year as the market moderates, supply is still low. The graph below helps tell the story of why there still aren’t enough homes on the market today. It uses data from the Census to show the number of single-family homes that were built in this country going all the way back to the 1970s.

What’s Causing Ongoing Home Price Appreciation? | MyKCM

The blue bars represent the years leading up to the housing crisis in 2008. As the graph shows, right before the crash, homebuilding increased significantly. That’s because buyer demand was so high due to loose lending standards that enabled more people to qualify for a home loan.

The resulting oversupply of homes for sale led to prices dropping during the crash and some builders leaving the industry or closing their businesses – and that led to a long period of underbuilding of new homes. And even as more new homes are constructed this year and in the years ahead, this isn’t something that can be resolved overnight. It’ll take time to build enough homes to meet the deficit of underbuilding that took place over the past 14 years.

Millennials Will Create Sustained Buyer Demand Moving Forward

The frenzy the market saw during the pandemic is because there was more demand than homes for sale. That drove home prices up as buyers competed with one another for available homes. And while buyer demand has moderated today in response to higher mortgage rates, data tells us demand will continue to be driven by the large generation of millennials aging into their peak homebuying years (see graph below):

What’s Causing Ongoing Home Price Appreciation? | MyKCM

Odeta Kushi, Deputy Chief Economist at First American, explains:

 “. . . millennials continue to transition to their prime home-buying age and will remain the driving force in potential homeownership demand in the years ahead.”

That combination of millennial demand and low housing supply continues to put upward pressure on home prices. As Bankrate says:

“After all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials.”

What This Means for Home Prices

If you’re worried home values will fall, rest assured that experts forecast ongoing home price appreciation thanks to the lingering imbalance of supply and demand. That means home prices won’t decline.

Atlanta Market Update

Some of this information comes at a more National level look, and we all know that real estate is local, and all about location, location, location! 

Key housing metrics, including the median sales price, swung to negative territory in Atlanta on a month-over-month basis in June, Georgia MLS reported, citing its 12-county Housing Market Snapshot. 

The median price for a home in Atlanta’s core market fell 2.1% to $403,169 from $412,000 in June. Year over year, the median price was up 15.5%. 

Atlanta-area home sales by dollar volume fell in July, dropping 18.9% month over month and 15% year over year to $2.84 billion.   

The number of houses sold in July was 5,918, down 16.9% from June and 27% from July 2021.   

New listings in July totaled 9,268, a 14.1% decrease from June and a 5.3% increase from last July, while active listings jumped 15.9% month over month and 57.1% year over year to 11,970.   

Georgia MLS’ 12-county report includes Cherokee, Clayton, Cobb, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Paulding and Rockdale counties. 

Bottom Line

Based on today’s factors driving supply and demand, experts project home price appreciation will continue. It’ll just happen at a more moderate pace as the housing market continues its shift back toward pre-pandemic levels.

Why Rising Mortgage Rates Push Buyers off the Fence

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Why Rising Mortgage Rates Push Buyers off the Fence

Why Rising Mortgage Rates Push Buyers off the Fence | MyKCM

If you’re thinking about buying a home, you’ve probably heard mortgage rates are rising and have wondered what that means for you. Since mortgage rates have increased over two percentage points this year, it’s natural to think about how this will impact your homeownership plans.

Today, buyers are reacting in one of two ways: they’re either making the decision to buy now before rates climb higher or they’re waiting it out in hopes rates will fall. Let’s look at some context that can help you understand why so many buyers are jumping off the fence and into action rather than waiting to buy.

A Look Back: How the Current Mortgage Rate Compares to Historical Data

One factor that could help you make your decision to buy now is how today’s mortgage rates compare to historical data. While higher than the average 30-year fixed rate in recent years, the latest rates are still comparatively low when you look at the bigger picture of where rates have been since 1971 (see graph below):

Why Rising Mortgage Rates Push Buyers off the Fence | MyKCM

Mark Fleming, Chief Economist at First American, explains it like this:

“. . . historical context is important. An average 30-year, fixed mortgage rate of 5.5 percent is still well below the historical average of nearly 8 percent.”

If you’re deciding whether to buy now or wait, this is important context to have. Today’s mortgage rate still gives you a window of opportunity to lock in a rate that’s comparatively lower than decades past.

A Look Ahead: What Happens if Rates Climb Further

The buyers who are springing into action now are also motivated to make their move because they know rates have risen steadily this year, and they’re eager to get ahead of any further increases.

Why? When mortgage rates climb, they impact the monthly mortgage payment you’ll have on the home you’re buying. Basically, it’ll likely cost you more to buy a home if you wait. Experts say mortgage rates will rise (although more moderately) in the months ahead. Odeta Kushi, Deputy Chief Economist at First American, explains:

“. . . ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”

So, if you’re ready and financially able to buy now, it may make more sense to get off the fence and make your purchase sooner rather than later. As Nadia Evangelou, Senior Economist at the National Association of Realtors (NAR), says:

“With even higher interest rates on the horizon, I don’t see any reason to hold off from purchasing a home right now. If you feel financially secure, you should start looking for a home.”

At the end of the day, there is no perfect advice on when to buy a home. What you should do depends on your goals, your finances, and your personal situation. Use this information with the help of local real estate professionals to make an informed decision on what’s best for you. The Mortgage Reports sums it up best:

“. . . if you’re on the fence about whether to buy now or wait for a better deal, buying sooner rather than later might be wise. That said, home buying is always a personal decision. Whether you should buy in 2022 depends on your financial situation and the local housing market where you live.”

Bottom Line

For many buyers, rising mortgage rates are motivating them to act now and make a purchase before rates rise higher. To decide what move is best for you, let’s connect so you have expert advice on your side. You can reach me HERE!

Moving to Atlanta Georgia – Highest and Best Real Estate Offers

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So, you’ve made an offer on a home (in this crazy market that is 2020-2021) and the Seller and Seller’s agent come back and ask for “highest and best.” What exactly does that mean? This is a term that both Buyers and Sellers need to understand and how it can affect the purchase (or sale if the Seller) of the home. 

“Highest and Best” What Does It Mean?

First off, it means what it says. You may have already submitted an offer on a home, and the Seller has received multiple offers on their property. They are asking you to look at your offer, and submit your “highest and best.” You can also find this term on homes listed, meaning if you still wanted to submit an offer, you better have your pencil sharp! Sometimes, a Seller will just review the offers they have and select the best one (with the help of their agent, of course!) But then others will see if they “can do better” and call for highest and best. 

There are many parts to your offer, and you want to look at all of them to see where you can improve. It’s a common mistake for a buyer to just focus on one part of their offer. Let’s look at some common mistakes Buyers make in this situation.

“Highest and Best” Common Mistakes

Put it in Writing

In Georgia (and probably any state) a verbal offer is not a binding offer. Your agent needs to update your offer you have submitted, and have you sign it. This can be done in person, but with today’s real estate technology, it can be done electronically. Pay particular attention to your pre-approval letter. If you increased the purchase price significantly (or at all) make sure you have an updated pre-approval letter from your lender. 

Finding out What is Important to the Seller

Well, getting the most money for their house, right? Sure, that’s part of it, but there are other factors that could be more important to the Seller. Your agent should have this conversation with the Seller’s agent to learn of any unique situation that the Seller might have. One example is a longer closing date. Maybe the Seller is under contract to purchase a new construction home, but it won’t be finished for 2 more months. Your offer could include a closing date to match the closing date on their new home. Another consideration is to close earlier, but then “lease back” the home to the Seller for those two months. You become a landlord in this situation and would need a lease in place (your agent can help with this as well) and you also have to confirm your lender will allow this. 

Just Changing the Price

As we said earlier, there is more to your offer than just the purchase price. A common mistake is buyers just raise the price, without looking at the other terms of their offer. Other parts to consider: 

  1. Contingencies in the Contract  The most common contingencies in a Georgia real estate contract are the financing and appraisal. In a hectic, seller’s market, it may be a challenge to shorten your appraisal contingency, as a third party does this on behalf of your lender. But a good relationship with your lender will help, as they will know how much time they can work with to get an appraisal back. Your financing contingency is completely up to your lender and where you are in the loan approval process. A good lender can have you fully approved and they just need the purchase contract and the appraisal to finish your loan. This means you have submitted all the required documents to your lender, and they have been able to approve your loan based on all of that information. Here again we refer to the lender you work with and the things you need to do!  
  2. Earnest Money Deposit Earnest money is your good faith deposit attached to your purchase agreement. There is no set amount required in the state of Georgia, but by offering a large earnest money deposit, you are showing to the Seller that you are serious about buying their home, and are willing to put up a larger deposit. This amount can later become an issue if there Buyer cannot close, and the Seller seeks to retain that deposit. 
  3. Due Diligence Period In Georgia, you have an opportunity in a purchase contract to ask for a period of time to complete a home inspection, review condominium or HOA documents and any other information you may want to obtain. This is a negotiable period of time, and can be as short as “0” days to 10 days. During this time, the buyer has the option to terminate their contract and receive a full refund of their earnest money payment. To the Seller, this is a  statement like, “I love your home (submitted an offer) but I’d like to take a second look and make sure I am happy (inspection, etc.)” It also means the Seller could lose valuable marketing time with their home off the market during this due diligence period. 

Due diligence period

Waiting For a Deadline

When the Seller asks for “highest and best” there will be a time limit, or deadline, when your revised offer is due by. First, it might seem like being right at the wire will be the best way to win. (think of an auction when the final bid comes in at the ‘going, going’ and it wins). But just because the Seller provided a deadline, does NOT mean they will honor it. If they receive a really great offer before the deadline, they may choose to move forward with that offer….and it might have been yours if you had already submitted it. It’s easy to get this offer in quickly via the electronic documents and systems that you agent has in place. 

Do You Have the Right Team on Your Side?

When you are buying a home, there are several people involved that help you get to the Celebration Day! Those people make up your real estate team. If you are working with a local lender, they can have better contact with their underwriting department to get you that loan approval we mentioned earlier. If there is a last minute need to update your preapproval letter, you can miss out on that offer when they are an unresponsive, or online lender that is not easily accessible. 

A local lender can also call the listing agent directly to confirm that you are indeed pre-approved (or have that full loan approval) and this could put you at an advantage. Also part of your team is the home inspector. Working with a reputable company that can get your inspection scheduled quickly is important as well. (And that they do a GOOD inspection…it’s not all about how much they charge) 

And the reputation of your agent is important. If they are known for being easy to work with and responsive to emails and phone calls….this can make a difference.

Some Final Thoughts

Who you work with matters! You want to have an agent that can help you understand the market conditions, what’s happening in the particular neighborhood where you are looking and be able to build you a strong offer! If you know there are going to be multiple offers, then you want to have your best foot forward with your first offer. You could be competing with an all-cash buyer with minimal or no contingencies, but cash does not always win! 

5 Mistakes Homeowners Make Which Affect Value

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Whether you have lived in your home for 3 years, or even 30 years, there are choices you can make during that time that will affect the future value of your home. Let’s take a look at 5 Mistakes Homeowners Make Which Affect Value.

Curb Appeal

Homeowner Values What’s that phrase…”you only get one chance to make a first impression?” Nothing could be more true when it comes to selling your home. (This is not quite as important when selling a condo, but I’ll give you some suggestions there too!) 

When a potential buyer drives by, or comes with their real estate agent, the first thing they are going to see is how your home looks from the street. And this is what they will see online if they saw your home there first. If your landscape lacks some luster, then spruce it up. Seasonal plantings for Spring, Summer or Fall/Winter make a great impression. If you have any landscape beds, a fresh layer of mulch or pinestraw is a night and day difference in how things look. If your lawn is older, it may have some weeds…or lots of weeds. Starting a weed control program now, could actually make your lawn look worse. A tip here is to keep it mowed really sort. Face it, weeds grow way faster than any grass, but if kept mowed short, don’t show as much. 

Any shrubbery you have should be trimmed, and trimmed away from the house, if necessary. Think how you look and feel after a haircut or a visit to the beauty salon! Well, your landscape will look and feel the same way. 

Curb appeal extends up to the exterior of the home as well. If you have peeling paint, it lends to an air of “this home has been neglected.” Fresh paint (both inside and out) go a long way to making your home look better. 

Condominium Curb Appeal

In a condominium, first impressions are usually found in the lobby area where the buyers will first arrive. This is pretty much out of your control, but one thing you can do is make sure you visit personally with any Concierge staff that may be working when your condo can be shown. They appreciate your conversation, and they DO make a difference on how a buyer can feel about a building. The only other thing you may be able to focus on is the hallway in front of your condo and your front door. If you have any damage to your door, work with your HOA and property management to get it repaired/replaced. If your hallway is not very clean due to lack of a housekeeping staff…you might be wise to grab your own vacuum and hit the carpet! Does this sound like crazy? Maybe, but remember that Buyer is going to be walking from the elevator to your door and what they see…well….

Deferred Maintenance

How to Improve your Home ValueThe curb appeal we just talked about falls into the category as well. If you have not maintained the landscape around your home, a potential buyer will be looking at the costs (and work if they do it themselves) to make the home look better. 

If you’ve had a water leak in the past, but did not have the damage repaired, this needs to be a priority. You still need to disclose this information on your Seller’s Property Disclosure Statement, but you don’t want it to be obvious. You want a repair that makes it look like it never happened. 

A dripping faucet…a cracked switch plate cover, severely scratched hardwood floors, broken window blinds, burned out lights or inoperable lights or ceiling fans…all these things will go a long way towards a better looking home. 

If you driveway is severely cracked from tree roots, you might want to consider a new driveway. This is no small expense, but will help you with the value of your home as well as the aforementioned curb appeal. (don’t forget to pressure wash it too!)

There are two sides to having a pre-listing inspection done on your home. First, it will help you identify things you can fix to keep a future report cleaner. It can also identify things you now need to disclose to a potential buyer because you now know about them. (Think mold or dampness in a basement or crawl space) But this inspection can really give you a detailed “to-do” list to have your home in the best shape possible. It also can help you with future negotiations as you know what a buyer may find when they have their home inspection done.

Over Improved Or Trendy

We’ve put two of our 5 Mistakes Homeowners Make Which Affect Value together here, because they can be one in the same. 

Valuable Renovations for HomeownersAs you make improvements or renovations to your home, you should take personal taste and a future sale into consideration. Personal example…in my last condo, we had black subway tile backsplash in the kitchen. I knew it could look so cool with a blue or even a red tile. A personal taste that a future Buyer would not like at all. And they would look at that as an immediate expense they would incur to make that change. We are not saying don’t make your home or condominium a place you can’t enjoy, but keep design ideas in mind that will help in the future. Of course, if you remodeled a kitchen 15 or 20 years ago, it’s probably going to show it’s age both in wear and design styles by now.

If you go “over the top” on a kitchen or bathroom renovation, because it is what you want, just bear in mind that it may be more than your neighborhood or building can justify in value, and you may not get all of your money back out of the over-improvement. 

Painting can be the same. ( I recently saw a listing where almost every room had some kind of mural painted on the walls. They were amazing in detail…but certainly not for everyone.) So if you are selling your home and you have not painted the interior in a long time, and have some bright, or “off” colors in rooms, now is the time to make it neutral. A buyer can live with that builder gray for a lot longer than they can that bright yellow room your kids loved. 

Make your home….your home…but think long term how the changes you are making could make the sale of your home more challenging. 

As-Is

5 Mistakes in Homeowner valueThis marketing choice can send various messages. “We know our house has issues and we are not going to deal with them.” We have seen the phrase on listings, “As-is, with right to inspect.” What this means is you can have an inspection done on the home as part of your due diligence period, but we are not going to make any repairs or concessions. Sometimes this can be the best way if you are selling an estate property you inherited. You don’t want to take time to address deferred maintenance or other issues. 

But if you choose this route, you may want to consider your listing price. Using round numbers, if you know homes in your neighborhood are selling for $300,000 that have been updated and well cared for, you may want to price your home $10-30,000 less than that price point. Again, this is all determined by what needs to be done and the condition of the home. (Kitchen and baths are original, old carpet, wallpaper, etc.)

It goes back to your goal with the sale of the home. If you just want to get it sold, or if you want to maximize the return on the sale, this will determine if “as-is” is the way to sell your home. 

And hiring the right Realtor is an important consideration. Just because you have a friend that is a real estate agent, they may not be familiar with your neighborhood or type of home (think condominium vs. single family home). 

Closing Thoughts!

When a Buyer is looking at your home, they will take many things into consideration, and many of them will be very personal in nature. After all, buying and selling a home is not only a big financial decision, but an emotional one as well. 

A garage, or lack thereof, could be a deal breaker. But a buyer will look at a kitchen and bath remodel and think, “I love this kitchen (or bathroom)” or they can think “Oh these kitchen cabinets and flooring have to go!” 

Sellers Are Returning to the Housing Market

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Sellers Are Returning to the Housing Market

Sellers Are Returning to the Housing Market | MyKCM

In today’s housing market, it can be a big challenge for buyers to find homes to purchase, as the number of houses for sale is far below the current demand. Now, however, we’re seeing sellers slowly starting to come back into the market, a bright spark for potential buyers. Javier Vivas, Director of Economic Research at realtor.com, explains:

“Seller confidence has been improving gradually after reaching its bottom in mid-April, and now it appears to have reached an important recovery milestone…After five long months, sellers are back in the housing market; while encouraging, the improvement to new listings is only the first step in the long road to solving low inventory issues keeping many buyers at bay.”

Even with the number of homes coming into the market, the available inventory is well below where it needs to be to satisfy buyer interest. The National Association of Realtors (NAR) reports:

“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.”

Houses today are selling faster than they’re coming to market. That’s why we only have inventory for 4 months at the current sales pace when in reality we need inventory for 6 months to keep up. But, as mentioned above, sellers are starting to return to the game. Realtor.com explains:

“The ‘housing supply’ component – which tracks growth of new listings – reached 101.7, up 4.9 points over the prior week, finally reaching the January growth baseline. The big milestone in new listings growth comes as seller sentiment continues to build momentum…After constant gradual improvements since mid-April, seller confidence appears to be reaching an important milestone. The temporary boost in new listings comes as the summer season replaces the typical spring homebuying season. More homes are entering the market than typical for this time of the year.”

Why is this good for sellers?

A good time to enter the housing market is when the competition in your area is low, meaning there are fewer sellers than interested buyers. You don’t want to wait for all of the other homeowners to list their houses before you do, providing more options for buyers to choose from. With sellers starting to get back into the market after five months of waiting, if you want to sell your house for the best possible price, now is a great time to do so.

Why is this good for buyers?

It can be challenging to find a home in today’s low-inventory environment. If more sellers are starting to put their houses up for sale, there will be more homes for you to choose from, providing a better opportunity to find the home of your dreams while taking advantage of the affordability that comes with historically low mortgage rates.

Bottom Line

While we still have a long way to go to catch up with the current demand, inventory is slowly starting to return to the market. If you’re thinking of moving this year, let’s connect today so you’re ready to make your move when the home of your dreams comes up for sale.

Rents Are Rising Should I Buy?

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Renting vs buying a homeAll over the country, but certainly in Atlanta, renters should be thinking….Rents Are Rising Should I buy?

But first you have to look at why you may be renting a home or condo in the first place. 

There can be any number of reasons a person chooses to rent vs. own their own home:

  • Freedom to transfer to another city quickly for job opportunities
  • Someone else takes care of all the maintenance
  • Someone else pays the real estate taxes (and gets the deduction)
  • Credit issues or debt issues
  • Living in brand new apartment ( not always the case) 
  • Lack of saved money for down payment  — and mis-information about how much that is

That is just some of the reasons you might want to rent. But every year, you “roll the dice” as to how much your rent may go up. Maybe that increase keeps you from saving for that down payment? Or keeps you from doing other things as you feed more money to your monthly housing costs. 

Rents Are Rising Should I Buy?

But when you purchase and OWN your home, you get lots of benefits as well. 

When you own the home, everytime you write that mortgage payment you are working towards paying off your mortgage and building home equity. Not to mention, you get the tax deductions of the cost of purchasing the home (your first year) as well as the property taxes you pay. (All of these things are subject to regulatory changes, so you always want to know what’s new or changed in tax laws) …..and a conversation with your financial advisor and accountant would be in order. But let’s look at the list above and apply them to home ownership:

Rents are Rising Should I buyFreedom to transfer to another city quickly for Job Opportunities

Ok, there is truth to that, but also in the current (2019) market with limited inventory, you may be able to sell your home quicker than you might think. There may be the possibility of renting your home (a condo will have much more restrictive leasing abilities) in case you think you may move back, or if it does not sell in a time frame you have established. 

Someone Else takes care of all the Maintenance

Well, you do become responsible for the maintenance of your home when you are the owner. But this can be looked at in a different way. First, if you purchase a condominium, your HOA fee covers the maintenance of things like the roof, exterior of the building, and any amenities the building has. (Pool, gym, club room, lobby, concierge, etc) You end up primarily responsible for your appliances, and HVAC within your condo. And the expense of repairing or replacing them can be reduced with a home warranty. Also, if you look for a condo that has had the HVAC recently updated, along with the water heater, your expenses, short term, are going to be reduced. 

Now, if you purchase a single family home, then the roof, lawn maintenance and the exterior of your home ARE your responsibility. But with that comes the “freedom” to have your own yard, space, and the ability to personalize your home. (Even in a single family neighborhood, you may have an HOA that will have guidelines about fencing your yard, paint colors or major landscape projects.)

Someone Else Pays the Real Estate Taxes (and gets the benefit!)

Yes, when you own a home or condo, there are property taxes. But you can usually deduct those when you file your income taxes. (Again, we are not accountants or lawyers so ask THAT professional about the impact of these on you personally…every situation is different) 

Also, the interest you pay on your mortgage is tax-deductible! 

Rents are Rising Should I buyCredit or Debt Issues

This can be a bit more tricky. But it’s not to say you can’t buy a home. Credit can be restored (over time) if you’ve had some tough times in the past. And when you get to a certain point, you can purchase, there just may be added costs like a higher interest rate. Debt issues can sometimes be easily fixed by just paying down, or off one credit account. But this is when, and why, we have you meet with a lender to determine your personal situation. We might learn that now isn’t the time for you to buy, but the lender can help you establish a plan to reduce debt and get you to the point you will qualify for a mortgage! 

Living in a Brand New Apartment

Depending on where you live, this might be a real option. In recent years, and in the current market, there are new apartment communities being built in almost every corner of Metro Atlanta. Now, what that monthly rent is…that’s the other story. So you may be living in an older apartment that has not had any recent renovations. But when you purchase a home or condo, you may find one that has recently had a major renovation or at least have things like all new appliances. Much of this will depend on where you are looking to live, what you can afford, and what is on the market!

Lack of saved Money for a Down Payment

One of the biggest misconceptions for home buyers, be you a first time buyer, or buying  your second or third home is the amount of money needed for a down payment. It is not 20% as many people think!!! Again, your situation will vary based on your credit and your debt to income ratio….but there are loan programs with as little as 3% down payment. So, on a $300,000 home or condo, that is $60,000 at 20% and $9,000 at 3%!!! A huge difference! Again, here is why getting that pre-approval with a lender is so important. By going through the application process, they can see what loan programs are available to you! 

Let’s get you started on the path to home ownership and building personal wealth through real estate! 

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Sending

Thom Abbott

Associate Broker, REALTOR(R)
905 Juniper Street, NE Suite 110
Atlanta, Georgia 30309
770.713.1505 Direct
404.876.4901 Office

 
 
 
 
 
 
 
 
 
 

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